Union firms more likely to raise pay

A far higher percentage of unionised private companies will increase pay this year when compared to non-union firms, according to a new study. The annual private sector pay survey, produced jointly by Industrial Relations News (IRN) and the CIPD, found that 72% of unionised firms expect to raise earnings in 2018, compared to just 49% of non-union firms.

The study also found that the number of private sector companies that increased pay in 2017 was significantly higher than the number who said they would at the beginning of the year. It found that 68% of firms raised pay in 2017, while only 50% had said they expected to do so at the start of the year.

Almost two-thirds said labour market pressures and skills shortages were driving their pay policy. No respondent cut pay over the last 12 months.

The survey found that 56% of firms expect to raise earnings in 2018. But, unveiling the results at the IRN annual conference earlier this month, CIPD director Mary Connaughton said the actual figure could again be higher.

The average 2017 pay increase in the 356 companies surveyed was 3.15%, compared to an average projection of 2.5% at the start of the year. Virtually all firms said increases would be contingent on performance and ‘normal ongoing change,’ while 12% said specific workplace changes would be required.

A significant 46% of firms said they expect to recruit extra workers this year, while another 45% said they would maintain current staffing levels.